Championed by our friends at Community Futures Saskatchewan
We’re here to make some baffling revelations about finding the sweet spot between your two P’s: Purpose and Profit.
In a year where survival alone is a Herculean task, focusing on a purpose may not sit well with your fight-or-flight response, but this one-on-one with our NTN Pro, Gordon Holley, President and CEO of Humanity Financial, will reveal how Founders can nail their numbers and thrive with a purpose-driven business model.
Part 1 // Purpose-Driven Enterprises Forging Their Future
It is abundantly clear that the future belongs to purpose-driven organizations. While the long-term trend was already headed towards enterprises weaving purpose into their business, COVID has essentially accelerated this transition, explains Gordon.
"Businesses with a clear social purpose are as, or more, profitable than businesses without,” suggests research. As more and more businesses are committing to a social purpose, millennials are catching the drift and expecting all businesses to have a larger purpose.
It is abundantly clear that the future belongs to purpose-driven organizations.
Funders and consumers alike are supporting businesses that strive to have a positive impact. If you’re missing the Purpose train, you’re going to see your top-line wither.
This, and a lot more, awaits you in Part 1 as Gordon takes us through an intense ride through the options that Founders have in terms of legally structuring their social-based enterprise.
Part 2 //Remodeling the Operating Expenses
COVID fell from the sky and crash-landed on the center of income statements, right where it hurts—the operating expenses.
Even with a shrinking topline, operating expenses continued to shower their wrath on Founders.
Sure, you may have saved-up on rent. But engaging a remote team comes with additional costs of technological infrastructure. There’s a silver lining, though. As Gordon highlights, funders have stepped up and provided leeway for additional operating expenses by removing some of the restrictions. This provides an interesting opportunity for businesses to remodel their operating cost structure.
Gordon digs deep into these quandaries in Part 2 for a timely discussion on how Founders can approach this remodeling opportunity with a purpose-oriented mindset.
Part 3 // The Tug of War between Purpose and Profit
Purpose is starting to occupy a central spot in the business world, so where does that leave our bottom lines?
Profits (eventually retained earnings) are our umbrellas for a rainy day. Do you recall people on TV using financial jargon as they say that a company has a “strong” balance sheet? Guess what the source of that strength is?
Hint: You'll find it in the bottom line.
Well-capitalized businesses are often the ones that are more immune to a Frankenstein-like COVID. This is easier said than done for non-profits, though. CRA may come knocking at a non-profit’s door the minute they see a profit on their master budget.
“CRA does recognize that all organizations have to have some financial sustainability,” explains Gordon.
CRA is bothered by an “intention to profit” when it comes to non-profits. As long as a non-profit doesn’t proactively seek out profits, the CRA is all fine and dandy.
Unexpected profits are not a problem. A non-profit's only nemesis is the intention to profit. Tune in and learn all you need to know about structuring your social-based enterprise from Gordon Holley in Part 3.
About the Pro // Gordon Holley, CPA, CA, FCPB
Co-founder, President and CEO
Humanity Financial Management Inc.
Gordon Holley works to build confidence and capacity through leadership and training across Canada’s charity and social purpose sectors.